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Emergency St!:-. Scrap Coalition Calls for Immediate Action as Scrap Pric-s

Reach New Highs

July 19, 2004

Recent Surge Means $14 Billion Impact on U.S . Economy

Washington, DC - After a $100-per-ton increase that pushed steel scrap prices to

record highs this month, the Emergency Steel Scrap Coalition called on the U.S.

Government to take immediate action to open scrap markets abroad, particularly in

Russia and Ukraine. The Coalition announced that it is preparing to file trade

petitions in the event that scrap export barriers abroad are not removed.

The Coalition has identified barriers to steel scrap exports in more than 10 other

countries, including outright bans on scrap exports, quotas, and export taxes.

Other countries that imposed such barriers include South Korea, Egypt, Taiwan,

Venezuela, Mongolia and Azerbaijan.

These barriers have led to sharp pricing disparities in global scrap markets. Most

notably, Russian steel producers are currently enjoying scrap prices that are

substantially below global market prices. Russian experts report 14 million of tons

of scrap available for export, but the combination of barriers in Russia (an export

tax, coupled with an outright ban on scrap exports through western ports) has

discouraged export of this scrap.

Meanwhile, U.S. pricing of steel scrap, which reached $300 per ton in March 2004,

then declined for several months, has now soared to historic highs. According to

American Metal Markets, prices for industrial scrap grades like No. 1 bundles and

No. 1 busheling rose by $100 per ton in Pittsburgh and Chicago, reaching $355

per ton. Shredded scrap prices rose by as much as $90 per ton, to between $280

and $290 per ton. AMM's story also included some reports of some industrial

scrap selling for more than $400 per ton, and material shipped throughout early

July on a "price to be determined" basis.

The Emergency Steel Scrap Coalition has already prepared a petition to the

Commerce Department Bureau of Industry and Security that would call for

temporary restrictions on U.S. steel scrap exports. However, at the same time the

Coalition has worked to encourage the Commerce Department and the U.S. Trade

Representative to negotiate removal of foreign barriers to steel scrap exports.

"We have waited, in the hopes that market forces would bring scrap prices back to

reasonable and historical levels," said Bob Stevens, president of the Coalition and

CEO of Impact Forge, Columbus, Indiana. "But it is clear that because of these

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Home> > Press Releases 

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Coalition Calls for Immediate Action as Prices 

July 19, 2004 

Recent Surge Means $14 Billion Impact on U.S. Economy 

Washington, DC - After a $100-per-ton increase that pushed steel scrap prices to 

record highs this month, the Emergency Steel Scrap Coalition called on the U.S. 

Govemment to take immediate action to open scrap markets abroad, particularly in 

Russia and Ukraine. The Coalition announced that it is preparing to file trade 

petitions in the event that scrap export barriers abroad are not removed. 

The Coalition has identified barriers to steel scrap exports in more than 10 other 

countries, including outright bans on scrap exports, quotas, and export taxes. 

Other countries that imposed such barriers include South Korea, Egypt, Taiwan, 

Venezuela, Mongolia and Azerbaijan. 

These barriers have led to sharp pricing disparities in global scrap markets. Most 

notably, Russian steel producers are currently enjoying scrap prices that are 

substantially below global market prices. Russian experts report 14 million of tons 

of scrap available for export, but the combination of barriers in Russia (an export 

tax, coupled with an outright ban on scrap exports through westem ports) has 

discouraged export of this scrap. 

Meanwhile, U.S. pricing of steel scrap, which reached $300 per ton in March 2004, 

then declined for several months, has now soared to historic highs. According to 

American Metal Markets, prices for industrial scrap grades like No.1 bundles and 

No.1 busheling rose by $100 per ton in Pittsburgh and Chicago, reaching $355 

per ton. Shredded scrap prices rose by as much as $90 per ton, to between $280 

and $290 per ton. AMM's story also included some reports of some industrial 

scrap selling for more than $400 per ton, and material shipped throughout early 

July on a "price to be determined" basis. 

The Emergency Steel Scrap Coalition has already prepared a petition to the 

Commerce Department Bureau of Industry and Security that would call for 

temporary restrictions on U.S. steel scrap exports. However, at the same time the 

Coalition has worked to encourage the Commerce Department and the U.S. Trade 

Representative to negotiate removal of foreign barriers to steel scrap exports. 

"We have waited, in the hopes that market forces would bring scrap prices back to 

reasonable and historical levels," said Bob Stevens, president of the Coalition and 

CEO of Impact Forge, Columbus, Indiana. "But it is clear that because of these 

http://www.wrf.com/press _release. cfrn ?press release id= 1291 

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202.719.4917 

dcorini@wrf.com 

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trade barriers, the global scrap market is not operating according to normal market

forces. We can't wait any more - there are too many U.S. companies and U.S. jobs

at risk."

The scrap trade distortions outside the United States have resulted in direct harm

to U.S. consumers, since half of the steel manufactured in the United States is

made from scrap. This increase of over $200 per ton on the 70 million tons of

scrap used in the United States means an inflationary cost increase of at least $14

billion," Stevens said. "In addition, U.S. scrap exports in 2004 are up another 10

percent year to date."

"Our trading partners have a choice," Stevens concluded. "We can all get rid of

trade barriers, or we can all put them up. We hope they will make the right choice.

And we hope the U.S. Government will encourage them to make it soon."

"We know the U.S. Government has pushed to remove these trade barriers, and

we appreciate their efforts," said Alan Price, partner at Wiley Rein & Fielding and

counsel to the Emergency Steel Scrap Coalition. "But now, it's time for results."

Because Russia and the Ukraine are not members of the World Trade

Organization, Price said the United States has the ability to retaliate against their

scrap export barriers very quickly under U.S. trade law.

For more information or to join the Coalition , visit www.serapemergency.com or

contact Alan H. Price at 202 . 719.3375 or aprice@wrf.com.

For more information, please contact Alan H. Price at 202.719.3375 or

aprice@wrf.com and Timothy C. Brightbill at 202. 719.3138 or tbrightbill@wrf.com.

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2005 Wiley Rein & Fielding LLP

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http://www.wrf.com/press_release.cfm?press_release_id=1291 8/8/2005

 EE-RM/STD-00-550 COMMENT 86

Wiley - Press Releases 

trade barriers, the global scrap market is not operating according to normal market 

forces. We can't wait any more - there are too many U.S. companies and U.S. jobs 

at risk." 

The scrap trade distortions outside the United States have resulted in direct harm 

to U.S. consumers, since half of the steel manufactured in the United States is 

made from scrap. "This increase of over $200 per ton on the 70 million tons of 

scrap used in the United States means an inflationary cost increase of at least $14 

billion," Stevens said. "In addition, U.S. scrap exports in 2004 are up another 10 

percent year to date." 

"Our trading partners have a choice," Stevens concluded. "We can all get rid of 

trade barriers, or we can all put them up. We hope they will make the right choice. 

And we hope the U.S. Government will encourage them to make it soon." 

"We know the U.S. Government has pushed to remove these trade barriers, and 

we appreciate their efforts," said Alan Price, partner at Wiley Rein & Fielding and 

counsel to the Emergency Steel Scrap Coalition. "But now, it's time for results." 

Because Russia and the Ukraine are not members of the World Trade 

Organization, Price said the United States has the ability to retaliate against their 

scrap export barriers very quickly under U.S. trade law. 

For more information or to join the Coalition, visit www.scrapemergency.com or 

contact Alan H. Price at 202.719.3375 or aprice@wrf.com. 

For more information, please contact Alan H. Price at 202.719.3375 or 

aprice@wrf.com and Timothy C. Brightbill at 202.719.3138 or tbrightbill@wrf.com. 

Contact Us I Site Map I Disclaimer I Privacy Statement 

© 2005 Wiley Rein & Fielding LLP 

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